Stocks snapped their three-session winning streak on the Tokyo Stock Exchange on Thursday, battered by a wave of profit-taking.
The 225-issue Nikkei average fell 58.38 points, or 0.29 percent, to close at 19,807.44. On Wednesday, the key market gauge rose 89.20 points.
The Topix index of all first-section issues edged down 5.20 points, or 0.32 percent, to close at 1,632.13, after gaining 9.88 points the previous day.
Stocks met with selling to lock in profits after the Nikkei gained nearly 600 points over the past three sessions through Wednesday, brokers said.
But the market’s downside was supported by buying from investors who took heart from the dollar’s rise above ¥110 after hopes grew for U.S. tax reform, brokers said.
“Expectations were boosted” after U.S. House Speaker Paul Ryan said Wednesday that an outline of the much-awaited tax reform plan will be released in the week of Sept. 25, an official of a bank-affiliated securities firm said.
The Tokyo market was also underpinned by brisk U.S. equities, brokers said.
All three major U.S. stock indexes — the Dow Jones industrial average, the S&P 500 index and the tech-heavy Nasdaq composite index — hit new closing highs in New York trading Wednesday.
In the Tokyo market, “there may have been selling to adjust positions ahead of (Japan’s) three-day weekend” through Monday, said Hideyuki Suzuki, head of the investment market research department at SBI Securities Co.
“There is often such position-adjustment selling after the market’s surge,” Suzuki added.
Falling issues outnumbered rising ones 1,231 to 683 in the TSE’s first section, while 114 issues were unchanged.
Volume inched up to 1.66 billion shares from Wednesday’s 1.60 billion.
Hit by profit-taking, textile maker Nisshinbo Holdings fell 9.83 percent after posting a maximum-allowable single-day gain Wednesday.
Also on the minus side were logistics facility leasing firm Cre and mobile phone carrier SoftBank Group.
By contrast, Furukawa Electric rose 2.80 percent after disclosing a plan Wednesday to double its fiber optics production capacity by the end of March 2020.
Oil companies Japex, Inpex, JXTG, Idemitsu and Showa Shell were also buoyant on higher crude oil prices.
In index futures trading on the Osaka Exchange, the key December contract on the Nikkei average was unchanged at 19,690.